MGCR 211 Lecture Notes - Lecture 5: Gross Margin, Perpetual Inventory, Matching Principle
Document Summary
Revenue recognition delivering or producing goods, rendering services, or other activities that. Revenues are inflows of assets and/or settlement of liabilities from constitute the entity"s ongoing major or central operations. Essential characteristics: inflows of assets or settlements of liabilities, result of some productive activity of the firm, major or central operation. Process of formally recording or incorporating an item into the financial statements of an entity as an asset, liability, revenue, expense, or the like. Essential characteristics: depiction in both words and numbers, included in financial statements or statement totals, disclosure by other means is not recognition. To be recognized: an item must be measurable, must be relevant, must be reliable. To recognize a revenue it must be: realized (or realizable, earned. We determine where a revenue is realized and earned through performance and measurement criteria. Ifrs has developed revenue recognition criteria to assist in resolving conflict. Either rely on a critical event or recognize it gradually over time.
